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Old Pipes, Big Need, Little Money
Cities Have Sticker Shock
(10/13/2003 Issue)

Growing funding gap drives search for innovative solutions

By Andrew G. Wright and Mary Buckner Powers

(Photo courtesy of CH2M Hill)

The nation’s wastewater treatment infrastructure is in sorry shape. Population growth and development have overwhelmed expansion of collection systems across much of the U.S. Maintenance often has lagged as many cities still rely on pipes that were put in the ground over a century ago.

Over a third of Newark, N.J.’s 170-mile collection system is brick. Alexandria, Va.’s sewer network even has a few feet of wooden pipe underlying its historic Old Town section. The two are not too different from aging systems in many other cities that are prone to leaks and spills.

A 2002 federal report estimated that 1.2 trillion gallons of overflows occur each year from combined stormwater and sanitary sewers. Inflow and infiltration is also a huge problem. "We estimate that our I/I may run as high as 45%," says Emily Baker, Alexandria’s city engineer.

There are about 16,000 publicly owned treatment plants in the U.S. Like the aging sewer systems that feed them, many have been chronically underfunded and are now wearing out. "In many places, the local politicians won’t step up," says Rob Pennington, an engineer in the Edison, N.J., office of consulting engineer Camp Dresser & McKee Inc. "They’re feeling strapped, probably running a deficit, with no prospect of help from Washington or their state capital. Problems are out of sight, either at the treatment plant or buried underground. To raise rates with a big capital program is viewed as a sure way for a politician to have an out-of-office experience."

Fixing or replacing pipes is the next step in cleansing the nation’s water and follows the early success of the construction grants program included in 1972’s Federal Water Pollution Control Act. The grant program funded a massive building of wastewater plants that treated flows to secondary standards. But cities and states are now on their own and the country seems stuck in a holding pattern. A 2002 U.S. Environmental Protection Agency analysis of water and wastewater treatment needs noted that wastewater treatment efficiencies are leveling off.

It should come as no surprise. The federal government in 1980 pumped $9.7 billion into water and sewer systems. Adjusted for inflation, that would be about $22 billion today. But by fiscal 2002 EPA funding had dwindled to a trickle of $2.2 billion a year.

Still, 35% of the nation’s rivers, lakes and streams remain unsafe for fishing, swimming or drinking, claims EPA. Reducing that percentage hinges on plugging sewer system leaks, overflows and collecting and treating runoff from nonpoint sources, say wastewater engineers.

VINTAGE Like other cities, Seattle’s water pipes and sewer system are showing their age. (Photo courtesy of Seattle Public Utilities)

Although the Bush administration is not pushing EPA to pursue major new regulation, the agency is working to improve water quality through establishing total maximum daily loads for specific pollutants in a given watershed, attacking disinfection byproducts and refining its Capacity Management Operations and Maintenance program, dubbed CMOM.

CMOM will require utilities to mitigate system overflows, provide capacity for base and peak flows and initiate extensive mapping and management controls. Delayed in 2000 and 2002, the industry expects to see the rule in place some time next year.

"Collection systems are really stressed. Fixing them will be really costly," says Pervaiz Anwar, director of business consulting for Brown and Caldwell. "The federal government doesn’t have the money. Neither do most utilities." The Walnut Creek, Calif.-based engineer has formed a joint venture with Hunter Water Corp., a utility operator-consultant in Newcastle, Australia, to promote systems management.

"Asset management isn’t exactly new, but it’s surprising how many utilities don’t even tell you the value of their assets," says Anwar. "Maximizing efficiencies and programming O&M in a systematic way is something that they’ve been doing in Australia and New Zealand for about two decades."

The partnership already has assisted a number of U.S. utilities in implementing asset management programs, including agencies in Seattle, San Diego, Sacramento and Orange County, Calif. The agencies are proactively implementing systematic programs that will probably resemble the forthcoming federal regulations, says Anwar.

While the federal government has pared funding, local rates have more than doubled. Still, the Association of Metropolitan Sewerage Agencies survey on rates shows the annual increase in local spending ran well ahead of the U.S. Consumer Price Index through 1994. In four of eight years since, the annual investment pace has lagged the index.

"Even though our members are trying to do their share, it’s clear that the existing financial model is inadequate," says AMSA Executive Director Ken Kirk. AMSA is trying to garner support for dedicated funding, similar to the highway trust fund that uses a tax on fuels to pay for federal highway system improvements. Kirk doubts the Bush administration will consider new taxes in any form. Still, "we believe that some sort of a dedicated fund is an idea with merit," he says.

EPA’s 2002 needs assessment supports his argument. The country needs to invest between $331 billion and $450 billion on wastewater treatment infrastructure by 2019, according to the study. Operation and maintenance needs are not included but the O&M gap adds between $72 billion and $229 billion.

A similar report issued last November by the Congressional Budget Office puts the annual shortfall for wastewater treatment at $20.9 billion per year. Annual O&M needs range between $20.3 billion and $25.2 billion.

Without an infusion of cash from somewhere, EPA fears a reversal of "hard-won water quality gains. By 2016 pollution levels could be similar to levels observed in the mid-1970s," the report notes.

Few expect much assistance from Washington, however. Near-term financial projections for the federal deficit are bleak. Municipal officials know that federal assistance of the kind that supported the big capital programs of the 1970s and 1980s won’t happen. "We’re on our own," says Chuck Clarke, Seattle Public Utilities executive director. "It’s pretty much us and our ratepayers."

SCALING UP In Newark, rehab contractor expanded cured-in-place pipe technology to 108-in.-dia sewer. (Photo courtesy Spiniello Cos.)

But some cities are reporting significant progress on programs that began more than a decade ago. Newark’s trunk lines date to the 19th Century and provide about a third of the Passaic Valley Sewerage Commission Plant’s 330-million-gal-per-day average flow. "We knew [around] 1990 that we’d have to spend about $50 million to bring the system up to current standards," says John George, Newark Water and Sewer’s program manager. Residents could not afford to finance that large of a program at once.

Anchored by a $44.3-million EPA grant, the city cobbled together funding from phased rate hikes, bonds and low-interest state loans. New Jersey lawmakers holding key positions on federal public works committees at the time assisted in landing the grant. "Their political stars were properly aligned," says Richard D. Fox, CDM president. "When that happens, you have to take advantage."

The program, broken into five phases, focuses on CSO abatement and storm drainage, with an emphasis on pipe rehabilitation and repair. CDM manages project design and contract administration. Newark is benefitting from recent advances in cured-in-place-pipe technology and spirited competition for contracts.

"Margins have come down as more people have come in," admits Doug Sanders, CIPP director of Spiniello Cos., which has won the majority of the rehab work in Newark. The Morristown, N.J.-based contractor has carved out a lucrative niche in large-bore CIPP work. Relining pipe with a diameter of 48 in. and larger earns the firm roughly $30 million a year–about half the company’s revenue, says Sanders. "Margins can be higher, but so are the risks," he says.

Recently, Spiniello crews ran CIPP sections of 105 in. and 108 in. in diameter, setting new standards for large-bore work. The process typically needs a two-day window of dry weather. Crews feed a resin-impregnated felt liner into pipe from one manhole cover to the next, then fill it with heated water that triggers a reaction to harden the resin. Water is pumped out and crews cut openings at the ends and to lateral lines. Structurally, the hardened tube "is sound and strong as concrete," says Pennington. "It should last 50 to 100 years."

George says the improved friction coefficient more than offsets the decrease in diameter. Equally important, CIPP minimizes disruption in busy downtown areas. "Cut and cover tears up streets for months at a time. This way, we take it block by block and we’re in and out in days," he says.

Nashville also is succeeding in its program (ENR 2/17/1997 p. 32). In 1990 the Tennessee Dept. of Environment and Conservation imposed a moratorium on sewer hook-ups. TDEC was alarmed at pollution from 20 billion gallons of untreated effluent spilling each year into the Cumberland River watershed from the city’s sanitary and combined sewers.

VAULTING AHEAD Nashville detention chamber helped restore 33 miles of Cumberland River. (Photo courtesy of CTE)

The city hired Consoer Townsend Envirodyne Engineers Inc., Chicago, to help develop and manage a $1.3-billion program. Work includes CSO separation, equalization basins, primary bypass blending, CIPP rehabilitation and new pump stations and pipelines.

It reduced overflows "from 21 billion gallons in 1990 to less than 1 billion gallons in 2002, and [eliminated] 24 CSO and 124 SSO overflow points," says Vernon D. Thompson, CTE vice president. Last November, regulators removed 33 miles of the Cumberland from a list of impaired waters.

Other municipalities have stumbled. In Birmingham, Ala., initial estimates pegged costs between $250,000 and $1.2 million to implement a 1996 federal consent decree for rehabilitation of the regional system. But now the estimate is closer to $3 billion, and sewer rates are likely to rise 12.5% a year for the next eight years, says Gary Martin, project manager for BE&K Engineering Co., which last year performed an audit of the program.

County Commissioner Gary White demanded the audit after taking control of the Jefferson County environmental services department. The BE&K-led team wrote a blistering review of program mismanagement, finding that the county and the environmental department made a number of "unwise decisions" that significantly increased capital and operating costs.

Under the consent decree, the county took over the sewer systems of 21 municipalities, adding 12 million linear feet of sewer line to its existing 3 million feet. It set a 2007 deadline 2007 to eliminate sewer overflows and bring nine treatment plants into Clean Water Act compliance.

"Decisions were made early in the game that increased costs,’’ says Martin.

One disputed action was the county’s decision to spend about $1 billion to increase treatment plant capacities, even though wastewater flows have not increased in five years and were not projected to increase. The capacity of the largest plant was doubled from 60 mgd to 120 mgd. "But it has never seen more than 40 mgd and that was in 1997,’’ says Martin.

Auditors found that the county did not review other technologies for cost-efficient alternatives. Contractor prequalification methods increased costs unnecessarily and ineffective cost and schedule controls pushed costs upward. "There is no such thing as no surprises in construction, but they could have had a better handle on the order of magnitude,’’ says Martin.

The report recommended the county hire an experienced program manager because the environmental department went from a $25-million-a-year operation to a $250-million-a-year agency. "It’s a monumental task. They’ve done some things right. It’s hard to know what you’re not doing if you don’t have the tools to do it,’’ says Martin.

Complicated public works projects benefit from the hiring of outside program managers, say many in the industry. "What a program manager brings to the table is the ability to focus resources on the problem, manage the risks and make sure the product is delivered,’’ says Skip Holland, managing executive for program management at MWH, Broomfield, Colo.

PAY TO PLAY Kids love Atlanta’s fountains, but city faces $3-billion clean water upgrade. (Photos courtesy of MWH)

MWH is program manager for Atlanta’s $3-billion sewerage program. The job is driven by two consent decrees, one for combined sewer overflows and the other for sanitary system overflows. Some 15% of the city’s sewers serving 19 square miles of downtown Atlanta are combined. The city now is building an 8.5-mile-long, 24-ft-dia tunnel designed to hold 150 million gallons of overflow. Flows would be pumped to a treatment plant when capacity becomes available. The city considered building another tunnel but value engineering determined that a storage tank near the treatment plant would be enough, says Rob Hunter, deputy commissioner for watershed management. The city has completed 10 short-term SSO projects, including an 8-mile-long, 16-ft-dia holding tunnel in the northern part of the city, but now it is evaluating the system to determine the next step.

Unlike Birmingham, Atlanta must add new capacity to accommodate its rampant growth. New capacity is not included in the decree, but is part of the total upgrade. "In rough terms, $1 billion is for SSO, $1 billion is for CSO and $1 billion is tied to other regulations,’’ says Hunter.

The problem facing both cities is how to pay for $3-billion systems. While Birmingham’s rates could double, Atlanta’s rates could triple, with the heaviest burden falling on its poorest citizens. Mayor Shirley Franklin (D) asked Fulton County to put a local option sales tax on the ballot to help fund the projects, but county officials refused.

Both communities are facing rate hikes that are unaffordable, says Eric Rothstein, senior economist with Denver-based CH2M Hill Cos., a part of Atlanta’s program management team. Within five years, low-income residents could face sewer and water bills that are 6 to 8% of their disposable income, far above EPA’s 2% threshold. Both municipalities need legislation that will allow them to spread the burden over a larger rate base, says Rothstein.

Even that might not be enough. For years engineers have been content to act as silent partners for their municipal clients, says William Howard, chief technology officer for CDM and incoming chair of the American Council of Engineering Companies. For their own sake and for the public good, they must assume a more active role, he says.

"Engineers have to plead their case to the public and to Washington," he says. "If all the work on the table needs to be funded locally, it will never happen."



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